FinCEN Names Banca Privada d’Andorra a Foreign Financial Institution of Primary Money Laundering Concern https://www.fincen.gov/news/news-releases/fincen-names-banca-privada-dandorra-foreign-financial-institution-primary-money
Contact: Steve Hudak (703) 905-3770
Immediate Release
March 10, 2015
WASHINGTON, DC - The U.S. Department of the Treasury's Financial Crimes Enforcement
Network (FinCEN) today named Banca Privada d'Andorra (BPA) as a foreign
financial institution of primary money laundering concern pursuant to
Section 311 of the USA PATRIOT Act (Section 311) and issued a related
Notice of Proposed Rulemaking (NPRM). This finding and NPRM are based on
information indicating that, for several years, high–level managers at
BPA have knowingly facilitated transactions on behalf of third–party
money launderers acting on behalf of transnational criminal
organizations.
“BPA's corrupt high–level managers and weak
anti–money laundering controls have made BPA an easy vehicle for
third–party money launderers to funnel proceeds of organized crime,
corruption, and human trafficking through the U.S. financial system,”
said FinCEN Director Jennifer Shasky Calvery. “Today's announcement is a
critical step to address this compromised financial institution's
egregious conduct and send a message that the United States will take
strong measures to protect the integrity of its financial system from
criminal actors.”
Today’s action also highlights the threat posed
by third-party money launderers to financial institutions. Transnational
criminal organizations often encounter obstacles in achieving direct
access to financial institutions internationally and in the United
States because of their illicit activities. To obtain access to
financial institutions, some transnational criminal organizations use
the services of third-party money launderers, including professional
gatekeepers such as attorneys and accountants.
BPA's activity of
primary money laundering concern occurred largely through its Andorra
headquarters. BPA is one of five Andorran banks and is a subsidiary of
the BPA Group, a privately–held entity. The activity involved the
proceeds of organized criminals in Russia and China, foreign corruption,
and other criminal activity. BPA accesses the U.S. financial system
through direct correspondent accounts held at four U.S. banks, through
which it has processed hundreds of millions of dollars. BPA's high–level
managers established financial services tailored to its third–party
money launderer clients to disguise the origins of funds. In exchange
for some of these services, BPA's high–level managers accepted payments
and other benefits from their criminal clients.
FinCEN has
delivered to the Federal Register a notice of its finding that explains
the basis for this action. In addition, FinCEN has delivered to the
Federal Register an NPRM that, if adopted as a final rule, would
prohibit covered U.S. financial institutions from opening or maintaining
correspondent or payable–through accounts for BPA, and for other
foreign banks being used to process transactions involving BPA. The NPRM
also proposes to require covered financial institutions to apply
special due diligence to their correspondent accounts maintained on
behalf of foreign banks to guard against processing any transactions
involving BPA. These measures are subject to a 60–day comment period,
beginning the day the NPRM is published in the Federal Register.
As part of the notice of its finding, FinCEN's action describes a
high–level manager at BPA in Andorra who provided substantial assistance
to Andrei Petrov, a third-party money launderer working for Russian
criminal organizations engaged in corruption. In February 2013, Spanish
law enforcement arrested Petrov for money laundering. Petrov is also
suspected to have links to Semion Mogilevich, one of the FBI's “Ten
Most Wanted” fugitives.
FinCEN's action also describes the
activity of a second high–level manager at BPA in Andorra who accepted
exorbitant commissions to process transactions related to Venezuelan
third–party money launderers. This activity involved the development of
shell companies and complex financial products to siphon off funds from
Venezuela's public oil company Petroleos de Venezuela (PDVSA). BPA
processed approximately $2 billion in transactions related to this money
laundering scheme.
FinCEN's action also describes the activities
of a third high-level manager at BPA in Andorra who accepted bribes in
exchange for processing bulk cash transfers for another third–party
money launderer, Gao Ping. Ping acted on behalf of a transnational
criminal organization engaged in trade–based money laundering and human
trafficking and established a relationship with BPA to launder money on
behalf of this organization and numerous Spanish businesspersons.
Through his associate, Ping paid exorbitant commissions to BPA bank
officials to accept cash deposits into less scrutinized accounts and
transfer the funds to suspected shell companies in China. Spanish law
enforcement arrested Ping in September 2012 for his involvement in money
laundering.
Director Calvery recognized the important
coordination in this matter with the Department of Justice, Criminal
Division, Asset Forfeiture and Money Laundering Section; the U.S.
Attorney’s Office for the Eastern District of Texas; U.S. Immigration
and Customs Enforcement’s Homeland Security Investigations; and the
Internal Revenue Service Criminal Investigation.
“We are seeing an
increasing trend where businesses and business professionals are being
recruited by transnational criminal organizations to facilitate corrupt
practices, such as creating shell corporations and fronts for money
laundering and other illegal activity,” said HSI Executive Associate
Director Peter Edge. “These corrupt individuals and institutions put
profits at a premium and serve as connections between the licit and
illicit worlds. Today’s action addresses the vulnerability created by
BPA and helps protect the integrity of the international financial
system.”
“International financial institutions are welcome to
provide a conduit for their customers to utilize American banks, as long
as they abide by our laws that govern those transactions,” said Richard
Weber, Chief, IRS Criminal Investigation. “However, when senior
managers of these institutions turn to corruption and bribery to enrich
themselves, they should not be surprised when special agents from IRS CI
come knocking at their door. IRS Criminal Investigation will continue
to work with law enforcement and financial partners to investigate these
institutions and senior officials who misuse their positions of trust
to facilitate third-party money launderers acting on behalf of
transnational criminal organizations.”
Director Calvery praised
the contributions of the Andorran authorities in this investigation and
appreciates their commitment to investigating this activity fully.

FinCEN is withdrawing its finding and proposed rulemaking under
Section 311 regarding Banca Privada d’Andorra (BPA), a bank
headquartered in Andorra, as BPA no longer operates in a manner that
poses a threat to the U.S. financial system. Authorities in Andorra
assumed control of BPA management and operations, arrested the chief
executive officer on money laundering charges, and are in the final
stages of implementing a resolution plan that is isolating the assets,
liabilities, and clients of BPA that raise money laundering concerns.
Under the resolution plan, the assets, liabilities, and clients of BPA
that do not raise money laundering concerns (i.e., the “good assets”)
will be transferred to a bridge bank, known as Vall Banc, that is
currently under the control of an Andorran government agency, Agència
Estatal de Resolució d’Entitats Bancàries (AREB).
FinCEN believes that the steps taken by the Andorran authorities
sufficiently protect the U.S. financial system from the money laundering
risks previously associated with BPA. Accordingly, FinCEN has
determined that BPA is no longer a primary money laundering concern and,
therefore, it is not imposing any special measures under Section 311
with respect to BPA. FinCEN also notes that, given the withdrawal of the
finding and proposed rule, no special measures under Section 311 would
apply with respect to Vall Banc’s financial operations or with respect
to the transfer of the good assets from BPA to Vall Banc or AREB.